Who pays for the issue of a Rates & Taxes & Levy Clearance Certificate in Johannesburg ?

The municipality issues assessment figures, including what is owed when the figures are issued plus 4 to 5 months in advance. This is calculated by taking the average of the total municipal account over the previous 3 months.

Included in the account is a municipal charge for issuing the figures – about R240.00.
The seller pays the whole assessment figure.

On registration of the transfer, we debit the purchaser with the municipal charge and credit the seller – so the Purchaser pays that charge in the end.

We do not pro-rate the municipal charges for Johannesburg. The municipality credits the whole payment to the Sellers account and in due course refunds the seller whatever is overpaid. Originally conveyancers attended to a pro-rata apportionment and refunded the seller his surplus immediately on transfer; but the council put a stop to this free service.

The municipality will (should) then open new accounts in the name of the Purchaser when the deeds office advises it that the property has been transferred – this advice is electronically submitted from the deeds office to the municipality. Conveyancers cannot intervene here.

In some other municipalities, the conveyancer does pro-rate the assessment figures because the municipality does not refund the seller.

The reason the Purchaser pays the charge to issue the figures is that this is part of the cost of transferring the property and the purchaser has agreed in the agreement to pay the costs of transferring the property.

Unfortunately, the Johannesburg municipality still has some challenges with its accounting systems and the figures they issue, for the issue of a Clearance Certificate for lodgement in the Deeds Office, are often inaccurate and / or slow in being calculated. This necessitates us having to instruct a municipal consultant on behalf of the seller to ensure accurate figures are issued. This charge is for the Seller, since the Seller has a legal duty to pay advance municipal utilities and physically obtain the clearance certificate: as an incident of selling a property that is registerable.

Levies Clearance Certificates

Conveyancers have to request the managing agents for a levy clearance certificate valid until the end of the month during which we expect registration.

This means the assessment figures will include all levies owed to the date of issue of the figures, plus the next month.

Usually the seller pays the whole assessment figure including the cost of issuing the figures. This varies with the different managing agents – between R600 and R1 400 usually.

On registration of the transfer, we debit the purchaser with the cost of issuing the figures and credit the seller – so the Purchaser pays that charge in the end.

Some managing agents will pro-rate the levies themselves, and refund the seller any overpayment.
Other managing agents will expect the conveyancer to pro-rate the levies and debit the purchaser and credit the seller in their final accounts – in this case the amount in credit after the sellers account is settled will be credited to the Purchasers new account by the managing agent.

The reason the Purchaser pays the charge to issue the figures is that this is part of the cost of transferring the property and the purchaser has agreed in the agreement to pay the costs of transferring the property.

Andrew Smith

Andrew Smith has 26 years of conveyancing experience, including subdivisions, township developments, sectional title developments, servitudes, usufruct transfers, general transfers, mortgage bonds, and uses his tax background to structure complicated transactions in the most tax efficient manner.